Talk:Market Value - GMSLA Provision: Difference between revisions

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2018
Nutshell


Market Value means:
Market Value means:
(a) in relation to the valuation of Securities or Equivalent Securities on any date:
(a) Securities: For Securities the mid price market quotation at Close of Business on the previous Business Day
(a)(i) such price as is equal to the market quotation for the mid price of such Securities and/or Equivalent Securities as derived from a reputable pricing information service reasonably chosen in good faith by Lender; or
(i) published on a reputable information service chosen by the Lender; or failing that
(a)(ii) if unavailable the Market Value thereof as derived from the mid price or rate bid by a reputable dealer for the relevant instrument reasonably chosen in good faith by Lender,
(ii) derived from a mid price from a dealer chosen by the Lender
in each case at Close of Business on the previous Business Day, or as specified in the Schedule, unless agreed otherwise or, at the option of either Party where in its reasonable opinion there has been an exceptional movement in the price of the asset in question since such time, the latest available price as determined by Lender, plus (in each case):
(unless either party thinks there’s been an unusual market movement since then, in which case the latest available price) plus:
(a)(iii) the aggregate amount of Income which has accrued but not yet been paid in respect of the Securities or Equivalent Securities concerned to the extent not included in such price,
(iii) accrued Income if not included in the quote.
provided that the price of Securities or Equivalent Securities that are suspended or that cannot legally be transferred, credited or that are transferred or credited or required to be transferred or credited to a government, trustee or third party (whether by reason of nationalisation, expropriation or otherwise) shall for all purposes be a commercially reasonable price agreed between the Parties, or absent agreement, be a price provided by a third party dealer agreed between the Parties, or if the Parties do not agree a third party dealer then a price based on quotations provided by the Reference Dealers. If more than three quotations are provided, the Market Value will be the arithmetic mean of the prices, without regard to the quotations having the highest and lowest prices. If three quotations are provided, the Market Value will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest or lowest price, then one of such quotations shall be disregarded. If fewer than three quotations are provided, the Market Value of the relevant Securities or Equivalent Securities shall be determined by the Party making the determination of Market Value acting reasonably;
Where the assets in question are not trading freely the Parties may agree their Market Value. Failing that, they can ask an mutually acceptable dealer to quote. If they can’t agree on one of those, they can seek an average of Reference Dealer quotations (with a laborious mechanism for figuring our what to include and how to average it). If all else fails the Market Value giving up altogether and falling back on the reasonable determination of the Party originally making the determination).[1]
(b) in relation to the valuation of Collateral on any date and subject as provided below, the Market Value of such Collateral determined in accordance with the valuation method specified in the Control Agreement as adjusted to take into account any applicable haircut or margin percentage specified in the Control Agreement, provided that, the value of Collateral that is suspended or that cannot legally be transferred, credited or that is transferred or credited or required to be transferred or credited to a government, trustee or third party (whether by reason of nationalisation, expropriation or otherwise) shall for all purposes be deemed to be zero;
(b) Letters of credit: for any Letter of Credit, its face value.
(c) Cash: for Cash its face value.

Latest revision as of 10:48, 21 March 2022

Nutshell

Market Value means: (a) Securities: For Securities the mid price market quotation at Close of Business on the previous Business Day (i) published on a reputable information service chosen by the Lender; or failing that (ii) derived from a mid price from a dealer chosen by the Lender (unless either party thinks there’s been an unusual market movement since then, in which case the latest available price) plus: (iii) accrued Income if not included in the quote. Where the assets in question are not trading freely the Parties may agree their Market Value. Failing that, they can ask an mutually acceptable dealer to quote. If they can’t agree on one of those, they can seek an average of Reference Dealer quotations (with a laborious mechanism for figuring our what to include and how to average it). If all else fails the Market Value giving up altogether and falling back on the reasonable determination of the Party originally making the determination).[1] (b) Letters of credit: for any Letter of Credit, its face value. (c) Cash: for Cash its face value.

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